The Insider

Throw Back the Little Ones ...
Not every fish that bit on the FBI trotline ended up on the stinger's stringer. Take Caesar Arizpe, the CEO of an Austin-based subcontractor in the Greater Houston Wastewater Program run by Montgomery-Watson and Brown & Root. After former city councilman Ben Reyes introduced Arizpe to the undercover FBI agents posing as the Cayman Group, the phony Latin-American investors were downright rude in giving the poor guy the brushoff.

The Arizpe Group was responsible for the technical side of monitoring and supporting minority- and women-owned small subcontractors in the Wastewater Program. As The Insider revealed last week, Arizpe was pressured into hiring Reyes' girlfriend, Rosalie Brockman, as a program supervisor with a salary of $38 an hour, and thereafter Reyes became a near-permanent fixture in her office at 1100 Louisiana.

According to former co-workers, Brockman supervised construction projects being performed by small contractors with the Wastewater Program, even though she was an electrical engineer with little knowledge of sewer construction. "She didn't know a manhole from a pothole," groused one. "Rosalie did not have the expertise to do the type of work in the small contractor program," says another, who claims Brockman actually spent most of her time working with Reyes and his brothers Greg and Tony on their family businesses. Once Brockman had the job, her Arizpe Group supervisor was removed and she began taking her orders directly from Brown & Root project manager Ira Scott, effectively removing Arizpe from control over its own employee. A subcontractor in the Wastewater Program recalls a visit made to his construction site by Brockman, Ben Reyes and several unidentified Mexican businessmen. Before they left, the subcontractor says, Brockman warned him not to tell Scott the entourage had been there.

At the time, Arizpe was thinking of pursuing an engineering contract for an expansion of Austin's airport, so he naturally turned to a guy he thought might be of help. "Ben was always telling us about all this money he had, and [that] he could do all kinds of things," recalls Arizpe. When he asked Reyes whether he knew anybody who could handle the financing end of the airport project, the former councilman was only too happy to oblige. "As a matter of fact I do," Reyes replied, and early this year he escorted Arizpe to the Cayman Group office on Bering.

Arizpe says he first figured Caymanites Carlos Montero and Marcos Correa to be drug dealers. The undercover agents managed to leave the impression that they didn't think much of Arizpe, either, demanding to know why he thought he was deserving of their money. Piqued by the grilling, Arizpe left after firing back, "I'm here checking you out as much as you're checking me out." Little did he know that the last place the FBI wanted to invest its investigation cash was in a legitimate business operation.

After that visit, Reyes orchestrated Arizpe's removal from the Wastewater Program in favor of then-port commissioner Betti Maldonado, who also was unwittingly working with the Cayman Group undercover agents in their effort to snare a cut of the convention center hotel project. But news of the FBI's sting of councilmembers broke the same week that Maldonado began showing up at the Wastewater Project's offices, a development that drew a close to the potentially lucrative marketing job she had secured with Reyes' help.

In a final letter to Montgomery-Watson that was copied to Councilwoman Gracie Saenz, the departing Arizpe complained that Brockman was too busy doing Reyes' business to do her project chores. Brockman, however, wasn't too busy to get into the political swing during her wastewater days, contributing $1,500 to Councilman Jew Don Boney's campaign last December and helping organize a fundraiser for him at Reyes' house.

During recent brief appearances before the federal grand jury examining the evidence from the FBI sting, Brockman and Tony and Greg Reyes reportedly invoked their Fifth Amendment right against self-incrimination.

... And Pan-Fry the Big Ones
Lee Brown rarely, if ever, lets his anger show in public, but the former Houston police chief apparently couldn't help himself last week when responding to testimony by private investigator Clyde Wilson in the trial of Sylvester Turner's libel lawsuit against Wayne Dolcefino and Channel 13. Wilson, after being asked by Turner's attorney whether he had gotten a ticket-collection contract from the Lanier administration as a payoff for leaking damaging information about Turner to Channel 13, placed Brown with lawyer Ray Shackelford as part of a minority-owned firm that got a 19 percent cut of the contract for "doing nothing."

"That's an out-and-out lie," said Brown, who's doing time as a Rice sociology professor while waiting to launch his '97 mayoral bid. "I didn't do any work, nor did I get any pay, nor was I supposed to do any work for them." Brown said he did consider helping the firm as a consultant after Shackelford approached him prior to applying for the contract, "but that's as far as it went."

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Tim Fleck
Contact: Tim Fleck